Can SBI Magnum Global Fund Offer Returns of 18% in Five Years?

If a fund is not performing in the current market situations, that does not mean it will not perform in future as well. One of the star performers in the mid-2000s, SBI Magnum Global Fund, has delivered superlative returns and is amongst the most popular funds in the industry. However, the fund has underperformed in the past two years, due to many global and economic changes such as the trade war which emerged in the world’s two largest economies, i.e., US and China, increase in the prices of crude oil, and much more. If you had invested in the fund from the past many years, then you may know that the fund has delivered good returns as well in various market conditions. Let’s find out is it still worthy of your investment!

An Overview of SBI Magnum Global Fund (G)

Description	Details
Launch Date	Sept 30, 1994
Category	Equity: Thematic-MNC
NAV (As on Sept 25, 2018)	Rs 165.215
AUM (As on Aug 31, 2018)	Rs 3,718 Cr
Expense Ratio	2.39%
Min. Investment	Rs 5,000
Min. SIP Investment	Rs 500
Return Since Inception	14.51%

An open-ended scheme, SBI Magnum Global Fund predominantly invests in the equity and equity-related securities of the multinational companies. It is also investing a small part of its portfolio in the debt instruments to keep the liquidity in the portfolio and to provide stability to the fund during volatility in the equity market.

Portfolio Allocation of SBI Magnum Global Fund (G)

 As per the financial analysts of MySIPonline, the fund has been investing its total corpus in just 38 companies, selecting them on the growth investment philosophy. The fund is selecting the companies whose major shareholding is by the foreign entity, or any Indian company which has 50% turnover from foreign countries, or foreign-listed companies.  

As we look at the sector allocation of the fund, it is overweight in healthcare, chemicals, engineering, services, and technology sectors. In all other industries, it underweights the benchmark. This sector allocation shows that SBI Magnum Global Scheme is currently investing significantly in the sensitive sectors and the other half is invested in the defensive sectors, keeping a small amount in the cyclical sectors. All this shows that the fund can earn high in the long-term and elevated risk so that it can deliver good performance in all the market cycles.

The fund majorly invests in the mid-cap stocks, therefore it is a bit more volatile. It has kept approximately 15% in large and small-cap space also. Henceforth, the investors who have an appetite of tolerating moderately high-risk on their principal amount should invest in the fund.

Past Performance Analysis of SBI Magnum Global Fund (G)

Fund/ Benchmark	Trailing Returns (in %)
	5 Yrs	7 Yrs	10 Yrs
SBI Magnum Global Fund (G)	21.07	16.85	16.48
NIFTY MNC TRI	20.04	18.12	17.14

* As on Sept 24, 2018

 As per the financial analysts of MySIPonline, if we look at the rolling returns of the fund, it has fallen by 14% in 2011 as against the category’s average of 25%, while in 2013 it lost just 6.4% as against 13.4% by peers. Similarly, in 2016, the fund lost -2% against -2.88% by peers. All these return cycles show that the fund is now capable of managing the losses in the bearish market.  

On the contrary, the trailing returns of SBI Magnum Global Fund growth has outperformed the benchmark in the five years but has underperformed in the seven and ten years. These returns depict that SIP is the best way to invest in the fund, and if you want the returns up to 15% from it, you should stay invested for at least 5 years.

 So, if an investor is looking for investing the capital through SIP mode in SBI Magnum Global Fund G with a long-term perspective of at least 5 years, they will get the returns up to 19%.  

Rock Your Growth by Investing in SBI Magnum Global Fund

One must always invest in a scheme which has skilled fund manager and management team who pick the quality stocks and offer you solid returns. Thus, the financial experts of MySIPonline have researched on the SBI Magnum Global Fund, which has emerged as one of the best diversified category funds. The fund is suitable mainly for the investors who have the appetite of tolerating high risk. So, if you are looking for the investment in the fund, walk down through the details discussed below:

An Outline of SBI Magnum Global Fund

With an AUM of Rs 3,458 Cr as on May 31, 2018, the SBI Global Fund has been investing its corpus in the top MNCs. The fund manager selects the companies who have a major shareholding in any foreign entity, foreign listed companies, or such Indian companies which have 50% turnover from offshore market.

The fund was launched in the year 1994, and it has been offering the growth and dividend options under the direct and regular plan. It is following Nifty MNC as its benchmark.
SBI Magnum Fund is an open-ended scheme, which predominantly invests in equity, equity-linked derivatives and debt securities with the proportion of 98% in equities and 2% in debts.

Past Performance Analysis:

The fund has spent more than two decades in the financial market and has provided the returns of 14.82% since its launch. The NAV of SBI Magnum Global Fund Growth as on June 19, 2018, is Rs 169.8484. The expense ratio of the fund is 2.03% as on Apr 30, 2018.

In the past few years, the fund has been underperforming, and also provided negative returns in the year 2016. The trailing returns of the fund in the past three, five, and seven years were 9.71%, 20.90%, and 17.15%, respectively. The fund has provided its highest returns in the year 2009 with 119.58%. Its returns for the year 2016 were -2% and for 2017 was 41.94%.

As per the financial experts of MySIPonline, the fund has underperformed in the past years, but has the potential to provide good returns in the long run.

Fund Manager and His Strategies:

The fund has been managed by Mr R. Shrinivasan till April 2018 but has been handover to Mr Anup Upadhyay in May 2018. He has 11 years of experience in the financial market. He joined SBIMF in the year 2007 as an equity analyst. He is a Charter holder from CFA Institute, USA and also has a degree of PGDM from IIM Lucknow.

Mr Upadhyay scrutinize the funds which offer branch equity, cost advantages, and technological edges on the basis of the bottom-up approach. As he has just entered in managing the SBI Magnum Global Fund G, it will be too early to tell how his fund is performing; therefore, you must watch out whether his strategies work or not.

The average market capitalization of the fund is Rs 18,362 Cr as on June 19, 2018. It has been investing in various market caps to provide the best of returns to investors. The fund is suitable for the investors who are seeking long-term capital appreciation and keen to invest in the equity market.

You may invest in the fund via minimum SIP of Rs 500 per month. For more information regarding the SBI Magnum Global scheme, you may connect with our experts at MySIPonline through call or email.